Buying stakes in well-known domestic names could be a shortcut for L’Oreal to piggyback on C-beauty’s momentum.
OleksKao
As first reported by Reuters, L'Oreal has made a minority stake in mass-market Chinese skincare brand Lan.
This marks its second investment in China. The investment in Lan follows L'Oreal's 6.67% stake in Chando for 442 million yuan ($62 million).
"We firmly believe investing in China is investing in the future, and we will continue to cultivate the Chinese market, work with more Chinese brands to create a beautiful future and meet the expectations of sophisticated Chinese consumers," said Vincent Boinay, L'Oreal's North Asia president and China CEO.
China has been challenging for international players, as an increasing proportion of its $75 billion beauty and personal care market has been won in recent years by domestic brands, dubbed C-Beauty. At the same time, overall growth has slowed, with consumer confidence hit by a prolonged property crisis and widespread concerns about job stability.
Buying stakes in well-known domestic names could be a shortcut for L’Oreal to piggyback on C-beauty’s momentum, said Ben Cavender, managing director at Shanghai-based China Market Research Group.
Cavender said, "L'Oreal and other international brands face a tremendous amount of pressure from domestic brands that are iterating new products faster and often have been more aggressive at marketing new skincare ingredients, concepts and routines."
